I consider losing all the money and XP you’ve accumulated since the last save to be extremely punishing. Maybe it’s just me, but I can’t begin to express how much I hate losing progress. Everything I just did for the last X minutes since the last save was completely undone. Nothing to show for it, no XP, no money, no progress toward my next goal. Just a complete fucking waste of time and X minutes of stress I’ll have to repeat. It’s like I lost power and corrupted my save file. It’s the worst feeling in gaming for me.
Yes, I realize you can get that XP/money back but it adds a level of stress that makes my stomach roil even thinking about it right now. No amount of suggestions on how to think of it differently has changed my perception of it significantly. I dealt with it in Elden Ring for a while but it’s probably the main reason I stopped playing that game.
Playing a game with similar mechanics but without the death penalty makes me realize how much more fun Elden Ring would have been without it. IMHO of course. YMMV